Financing Your Business

The Reality of Grants

Do NOT expect a grant to start your "for-profit” business. There are some (rare) federal grants based on the needs of the federal program for a product or process, and they are seeking someone that can develop these products.

Before developing a grant proposal, it is vitally important to understand the goals of the organization and the grant program. This can be done through Internet research or talks with the contact person in the grant description.

Grants are awarded on the applicant’s ability to fit its proposed activities within the grant maker’s interest areas.

Applying for a Small Business Loan

Personal Guaranty

Since the success of a small business is contingent upon the owner’s skills and commitment, a small business owner will almost always be required to give a personal guaranty as well as pledge personal assets as collateral.

Collateral

If you are using the proceeds from the loan for capital investment (buying equipment), the equipment can serve as a portion of the required collateral. If you use the money for operating expenses, the bank will ask for something of equivalent value to the loan as collateral.

Equity

Lending institutions will also require a start-up business to have an equity investment. This will require you to invest your own resources (dollars) in an amount between 20% to 50%, depending on the industry and risk factors of your business.

Experience

Beyond the numbers, a bank will want to know about you. What kind of management experience do your have in this field? The keys are to convince the lender that you understand every aspect of the business and are prepared to answer any questions.

Although sometimes loans are hard to get for start-up businesses, it is possible. Like a good scout, be prepared when your present your loan proposal to your lender.

What Are My Options besides a Loan?

If a lending institution turns you down for a start-up business loan, there are other resources you can consider the following.

Bootstrapping - Can you start small and expand your business?

Do you have equity in your home, car, life insurance or retirement that you can use?

Family or friends - Do you have relatives that have resources available to loan?

Related

Success Stories

Our Children’s Place day care and preschool is located on The Heights area of Hood River. OCP specializes in high quality, professional care of children in a warm and friendly, learning environment.

Though she has over 30 years in the industry, owner/operator Janet L. Davis faced challenges not uncommon to a growing business. For example, how to preserve the culture and feel of the environment she had created as her business expanded. Janet approached the Small Business Development Center at Columbia Gorge Community College for help. With the SBDC’s guidance, Janet was able to not only increase her knowledge of running a small business, but has also increased her staffing from 1 to 5 employees.

“The SBDC was very supportive and their advice was extremely helpful in setting us up for growth. I enjoy checking in with the SBDC to show the difference they have made in the success of Our Children’s Place. I would definitely recommend them to other area businesses!” -Janet Davis, Owner, Our Children’s Place

It is the policy of Columbia Gorge Community College and its Board of Education that there will be no unlawful discrimination or harassment on the grounds of race, color, sex, marital status, national origin, religion, age, disability, veteran status, sexual orientation, and any other status protected by applicable local, state, or federal law in any educational programs, activities, or employment. Robb Van Cleave, Chief Operating Officer.